Inferring consolidation entries from consolidated financial statements-Cost method Assume a parent company acquired a subsidiary on January 1, 2015. The purchase price was $1,100,000 in excess of the subsidiary's book value of Stockholders' Equity on the acquisition date, and that excess was assigned to the following [A] assets: [A] Asset Property, plant and equipment (PPE), net Patent Goodwill Original Amount Original Useful Life $340,000 17 years 360,000 12 years 400,000 $1,100,000 Indefinite The parent company uses the cost method of pre-consolidation Equity Investment bookkeeping. The Goodwill asset has been tested annually for impairment and has not been found to be impaired. Selected accounts from the parent, subsidiary, and consolidated financial statements for the year ended December 31, 2019, are as follows: Income statement Sales Cost of goods sold Gross profit Parent Subsidiary Consolidated $7,500,000 $1,650,000 9,150,000 (4,500,000) (890,000) (5,390,000) Investment income Operating expenses Net income 3,000,000 760,000 3,760,000 100,000 (1,400,000) (500,000) (1,950,000) $1,700,000 $260,000 $1,810,000 Statement of retained earnings BOY retained earnings Net income Dividends 2,000,000 840,000 2,240,000 1,700,000 260,000 1,810,000 (200,000) (100,000) (200,000) Ending retained earnings $3,500,000 $1,000,000 $3,850,000 Balance sheet Assets Cash 800,000 420,000 1,220,000 Accounts receivable 1,200,000 380,000 1,580,000 Inventory 1,900,000 490,000 2,390,000 Equity investment 1,760,000 Property, plant & equipment 6,000,000 910,000 7,150,000 Patent list 210,000 Goodwill 400,000 $11,660,000 $2,200,000 $12,950,000 Liabilities and stockholders' equity Accounts payable 900,000 150,000 1,050,000 Accrued liabilities 1,340,000 240,000 1,580,000 Long-term liabilities 4,000,000 550,000 4,550,000 Common stock 720,000 110,000 720,000 APIC 1,200,000 150,000 1,200,000 Retained earnings 3,500,000 1,000,000 3,850,000 $11,660,000 $2,200,000 $12,950,000 G